The Philippine banking industry has been implementing initiatives to boost its cloud usage, which is deemed necessary amid the shift to digital, according to a report.
In a joint study by International Data Corp. (IDC) Financial Insights and Huawei Technologies Co. Ltd., it was noted that Philippine banks were among the financial institutions in the Asia-Pacific region that were using cloud as means of storage management.
The report said there were “some positive developments in markets such as the Philippines and Korea but many still held back by regulatory fear.”
IDC and Huawei said that cloud is flexible storage because it allows data to be accessed digitally. At the same time, it serves a platform of services and tools which provides quick access to analytic tools and development tools, including artificial intelligence (AI).
“Flexible capacity for development work, testing and simulations mean that new products can be rolled out and brought to market at an accelerated rate, bypassing the need to wait for internal resources to be freed up first,” they added.
Cloud usage in banks comes in different forms—public, hybrid, and private—which depends on the purpose, the study explained. Still, all these types aim to provide security for the banks’ financial data and transactions.
While the pandemic forced the digital shift, the report said that it has also given the opportunity to test the internal controls and cyber security of the banks.
“Threat profiles have changed due to both internal and external factors and weaknesses have been exposed in the behavioral history method of detecting fraud which has spurred banks to think how they could improve in security and controls to better account for undocumented behavior in general while maintaining service levels and security standards,” the study noted.
With this, banks have turned to AI and machine learning to reconfigure their analytical models and improve threat detections and response actions, it added.
In May, IDC, along with banking software developer Backbase Asia-Pacific Pte. Ltd., released a study saying that 60 percent of the bankable customers in the Philippines are willing to shift to more digital banks.
Riddhi Dutta, Backbase regional head in Southeast Asian region and India, said that the digital solutions have offered flexible and quick banking services and platforms for the customers during the current pandemic.
With the increasing presence of neobanks and financial technology, the report said that the unbanked and underbanked segments in the Philippines are anticipated to be reduced by half to around 20 percent in five years.